Level 2 - What is Real Estate? Flashcards
Residential Real Estate
houses, condos, co-ops & townhouses
What two types of real estate can brokers specialize in in NC?
residential and commercial
Commercial Real Estate
property that is used for business. Ex.: gas stations, office buildings, office parks, convenience stores.
Land
the surface of the earth, including all permanently attached natural features, extending downwards to the center of the earth and upwards to infinity.
Real Estate
land plus improvements.
Improvements
non-natural structure built on or permanently affixed to the land. (modifications)
Real Property
land from the surface to the center of the earth and upward into space, all attachments and the bundle of legal rights of ownership
Personal Property
any asset other than real estate
What are the 3 unique physical characteristics of land?
indestructibility, immobility, uniqueness
Accession
the right to all of one’s own property products, including that which is added, either naturally or by human action, to the property already owned.
Accretion
gradual increase in land from soil deposits
Erosion
gradual decrease in land
Reliction
gradual increase in land from water withdrawing
Avulsion
sudden loss of land due to water flooding or changing course
What are the economic characteristics of land?
scarcity, situs, improvement, permanence of investment
Permanence of Investment
the economic principle that the capital and labor it takes to create improvements to and on land makes real estate a long-term investment.
Scarcity
the economic characteristic that informs the economic Principle of supply and demand
Situs
the economic significance of a property’s location.
When is the property’s highest and best use achieved?
when the property is used for the most appropriate purpose and yields its highest possible returns.
When demand is high and supply is low, what happens to the property?
becomes more valuable and prices rise
When demand is low and supply is high, what happens to the property?
becomes less valuable and prices fall.
Demand
a measure of general desire for an asset or commodity at a given time.
Market
a theoretical construct that isolates the selling and purchasing of any one particular commodity from the economy as a whole
Supply
in real estate, the amount of properties that are vacant or are available for sale or rent.
